Year 2016 - EVOLUTION OF INSURANCE INDUSTRY UNDER THE COMPETITION ORDINANCE 公平競爭法下保險業新進化

專題探討 FEATURE Background The Competition Commission is an independent statutory body established under the Competition Ordinance (Cap. 619) (the Ordinance) which was enacted in June 2012. The objective of the Ordinance is to prohibit conduct that prevents restricts or distorts competition, and to prohibit mergers that substantially lessen competition in Hong Kong. The scope of the application of the merger rule is limited to carrier licences issued under the Telecommunications Ordinance (Cap. 106). Implementation The Competition Ordinance is designed to promote competition and prohibit anti-competitive practices. The introduction of a cross-sector competition regime to Hong Kong is an important step in safeguarding our shared value of fair competition. The Competition Ordinance (Ordinance) ensures this by making certain business practices which undermine competition illegal. The Ordinance prohibits three types of anti-competitive conduct described under the First Conduct Rule, the Second Conduct Rule and the Merger Rule which are collectively known as the “competition rules”. The Competition Commission (Commission) has produced a number of videos which describe simply different types of anti-competitive conduct. Examples of conduct which may contravene the First Conduct Rule include: • Cartels (i.e. agreeing with your competitors to fix prices, share markets, rig bids or restrict output) • Exchange of information • Activities of trade associations and industry bodies • Joint Ventures • Vertical price restrictions • Exclusive distribution and exclusive customer allocation Examples of conduct which may contravene the Second Conduct Rule include: • Predatory pricing • Anti-competitive tying and bundling • Margin squeeze • Refusals to deal • Exclusive dealing Source: www.compcomm.hk Insurance Practice Insurance is a means of protection from financial loss. It is a form of risk management and spread of risk primarily used to hedge against the risk of a contingent and uncertain loss. An entity which provides insurance is known as an insurer, insurance company, or insurance carrier. A person or entity who buys insurance is known as an insured or policyholder. The insurance transaction usually involves insured, insurance intermediary and insurer. Impact of Competition Ordinance (Cap. 619) for Hong Kong Insurance Industry 30 2015 年刊與 2016 展望 YEARBOOK 2015 & PROSPECT 2016